Manish Kumar the founder and CEO of KredX
Credit: Special Arrangement
With the Union Budget for the upcoming financial year set to be presented on February 1, 2025, by Finance Minister Nirmala Sitharaman, the financial sector is abuzz with anticipation.
"As we approach the Union Budget 2025, we are optimistic about reforms that could stimulate growth across both the fintech sector and the broader economy. A revision in tax structures, particularly raising the tax-free threshold to Rs 10 lakh, could significantly boost consumer spending. Additionally, enhancing deductions under Section 80C to at least Rs 2.5 lakh would encourage greater investments in long-term savings instruments such as PPF, ELSS, and life insurance policies," said Manish Kumar the founder and CEO of KredX.
He added, "For the MSME sector, expanding credit guarantee schemes is critical to enhancing access to finance, enabling small businesses to build resilience and fuel growth. A differential tax regime tailored specifically for MSMEs would help reduce their financial burden and enhance their competitiveness. To help MSMEs thrive in the digital economy, the government could introduce a Digital Acceleration Fund, offering interest-free loans or grants for adopting AI, IoT, and cloud technologies."
Kumar urged for initiatives like Skill 2.0 and Skill Credits that could bridge the skill gap, encouraging MSMEs to invest in workforce upskilling, enhancing employability, and boosting global competitiveness.
"The Trade Receivables Discounting System (TReDS) market is projected to reach $50 billion in annual transaction volumes by 2026. Encouraging more companies to register on platforms like our newly launched DTX could amplify its impact. Lowering the turnover threshold for corporates on TReDS from ₹250 crore would further benefit MSMEs. Tailored subsidies and continued support for technological and skill upgrades are crucial, as these initiatives can reduce costs, improve productivity, and stimulate investment."
He believes that in manufacturing, incentives for companies under the 'Make in India' initiative, particularly those holding intellectual property, would foster innovation and strengthen domestic production. Reducing power supply rates could lower production costs and enhance export competitiveness.
He concluded by saying, " Increased budget allocations for digital infrastructure and innovation are vital to accelerating fintech transformation, especially through AI, blockchain, and biometric technologies, ensuring secure and trustworthy digital financial services."